Patrice Motsepe-backed Sanlam’s $365-million Assupol bid approved by regulators

Timilehin Adejumobi -

Key Points

  • Sanlam Life Insurance gains Competition Tribunal approval to acquire Assupol Holdings, with completion expected by October 2024.
  • Sanlam’s acquisition aims to enhance service capabilities in South Africa’s financial sector by integrating Assupol into its retail mass cluster.
  • Bidvest and IFC, which hold stakes in Assupol, will support the acquisition’s completion as they exit their investments.

Sanlam Life Insurance, a subsidiary of Sanlam, a leading insurer partly owned by Africa’s first Black billionaire Patrice Motsepe, has secured the Competition Tribunal’s approval for its R6.5 billion ($365 million) acquisition of Assupol Holdings. This approval, granted with an employment-related condition, represents an advancement in Sanlam’s strategic expansion.

Sanlam’s acquisition, first revealed in February, is slated for completion by October 2024. The integration of Assupol into Sanlam’s retail mass cluster—which includes Sanlam Sky, Safrican, and a joint venture with Capitec—aims to enhance its service capabilities within South Africa’s financial sector.

Strategic move amidst Bidvest and IFC divestment

This transaction comes after Bidvest Proprietary Limited and the International Finance Corporation (IFC)—which hold 46.02 percent and 19.41 percent stakes in Assupol, respectively—announced their intention to divest following a decade-long investment. Both entities have committed to supporting the resolutions necessary for executing the scheme of the arrangement, facilitating Sanlam’s acquisition.

Upon the deal’s finalization, Sanlam will assume full control of Assupol, a notable shift in South Africa’s insurance industry. Sanlam, founded in 1918 and boasting a market capitalization of over $10.1 billion on the Johannesburg Stock Exchange, is a key name in the financial sector. Patrice Motsepe, Africa’s first Black billionaire, holds a 7.8-percent stake in Sanlam through his investment vehicle, Ubuntu-Botho Investments, and serves as the deputy chairman.

Sanlam enhances market position in South Africa

Sanlam Life, a wholly owned subsidiary of Sanlam Limited, which is listed on the Johannesburg, Namibian, and A2X stock exchanges, provides a wide range of financial services. These include life and non-life insurance, financial planning, retirement solutions, investment, and wealth management. The company operates in Africa, India, Malaysia, and other regions. Recently, Sanlam formed a $1.9 billion joint venture with Allianz SE to expand its African footprint.

Assupol, listed on the Cape Town Stock Exchange, showcased robust financial performance for the year ending June 30, 2023. The company’s embedded value surpassed R7 billion ($393.8 million), with gross insurance premiums exceeding R5 billion ($281.4 million) and a solvency cover ratio of 179 percent.

Through its subsidiaries—Assupol Life and Assupol Investment—Assupol offers a range of insurance and investment products to clients across South Africa. The acquisition will strengthen Sanlam’s position in the South African insurance market, enhancing its ability to meet the continent’s financial needs.